According to the Law no. 85/2006, the debtor facing insolvency has the
obligation to file an application with the court, 30 days since the
situation arose, asking to be submitted to this law's provisions.
It is for the first time that the law stipulates that the debtor's failure
to put forward that application as well as the delayed submission of the
document is to be deemed bankruptcy and to be punished severely.
"The insolvency law enables the legal administrator/liquidator to file cases
for the annulment of the fraudulent acts concluded by the debtor to the
detriment of the creditors in the three years preceding the opening of the
procedure", said Gheorghe Piperea, vice president of the National Union of
Insolvency Practitioners.
Thus, the asset that had been sold fraudulently will return to the bankrupt
seller's patrimony.
A novelty introduced by the legislation refers to the bilateral
compensation (the netting agreements).
They refer contracts usually concluded with a bank aimed at operations with
derivative financial instruments, like covering the interest-related
risk.
"We expect this new principle, also recognised by most similar laws from the
developed countries, to bolster transactions by derivatives in Romania",
said lawyer Daniel Badea, chief of the Romanian-based office of Clifford
Chance law firm.
The National Union of Insolvency Practitioners had nearly 11,000 cases ongoing at the end of last year.
According to Piperea, the Romanian economy does not have a culture of
bankruptcy, which is still deemed a humiliating situation.
"On the other hand, the political decision makers are not yet aware of the
bankruptcy's role", he said, adding that the Tax Authority resorts to "the
unhealthy practice of replacing the insolvency procedures with
foreclosure".
Following regulations on simplified procedures for the registration of the firms enforced two years ago, some 120,000 companies that did not have a single registration code were deleted.
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